Dollar Remains Unimpressed by U.S. Payroll report

From Briefing.com:

09:25 ET 10-Yr: -01+/32..4.487%.. GNMAs: +01/32.. USD/JPY: 115.0500.. EUR/USD: 1.3339

The Rally That Wasn't: The buck was given a strong boost over & through recent resistance zones on the majors following the data but that boost fizzled quickly. The brief rally was aggresively sold into sending the dollar well lower. The euro went from 1.3276 to 1.3237 to 1.3344 in the span of about 20 minutes. The dollar index, for all its 47 point range post-data is now sitting around where it closed yesterday at 82.72 (-0.04). Negative sentiment on the dollar was clearly unaffected by the jobs report.

Nothing about that report looked bad for the dollar as the initial bond reaction showed. Not sure how else to interpret the action other than sellers using the liquidity around the news to get out of more dollars.

In other dollar watching news Brad Setser points out ICBC's interest to repatriate $16 bn generated by its IPO. Guess the PBoC will just step up and buy them but I wonder if their will be some political chatter about the request.

Update 3:50 PM:

From the FT:

“The market was looking for the next trigger to sell the dollar, rather than buy it,” said Tania Kotsos, strategist at RBC Capital Markets.

Stop That!

If I turn and look up from here, allowing myself to squint a bit, I can actually see the stop levels on my long bond trade. Clearly there is a disconnect between what I see and what the market sees. I also would say there is a bit of a gulf between the Fed's view that o/n rates are accomadative and the long bond's view that the gov't has run out of paper to print bonds on.

While I'm at it does anyone out there really believe that the unemployment rate is improving. I am going to go out on a limb and say that some day economists will look back at this period and realize lots of people could not admit they did not have jobs.

No more bond shorts until we make it back above 4.57 yield.

Wrong and Wronger

The dollar continues down the rabbit hole. My confidence in a long-side trade is ebbing. I will give it one more day and then lean towards shorting the next bounce, perhaps around the former 85 support. There was some strong economic data out of Britain that caused some of the weakness but it is hard to not see it as associated with the election.

I expect equities to linger around the same levels today, maybe trading slightly up. I continue looking through volume scans to find stocks that have momentum and will try to add positions slowly. The last few days have been quite strong and I don't think very many people participated in the rally. The indices probably need a pullback and you are seeing a bit of that with the selling in the nets and semis but it remains to be seen if the market at large comes back. Remember two Mondays (a week and a half) ago when the insurance scandal was going to collapse the market? There will probably be more obvious buying opportunities ahead.